Catalog Buyer Files Continue to Reflect Tough Economy

Most catalog sectors have seen universe declines over the past two years, but individual successes remain — especially for those with a focus on price and practicality.

WilliamsSonoma-CarolWrightA recent Metrics graph in The New York Times called Shoppers’ Shifting Priorities draws a not-too-pretty picture of retail sales from 2003 through 2009.  Dramatic falloffs abound, and not just for automobiles, but also apparel, home furnishings and department stores.  Folks that work in these beleaguered industries probably won’t be surprised to learn that the “liquor store” category is doing quite nicely.

The NYT study pulled data directly from the U.S. Census Bureau Retail Trade Report, which is a great (and free) resource for anyone looking for sales trends.  For direct marketers, another critical and more impactful measure of sector health can be found in housefile universes, specifically 12-month buyer counts.

As ParadyszMatera’s Research & Analysis team finalized universe numbers for our latest MarketTrends studies, I was still hopeful there would be some good news to share on the consumer catalog front. While there are in fact individual successes, many challenges remain overall.  For more perspective, here’s a look at two categories we cover regularly: Home and General Merchandise.

Home

Few catalog sectors were hit as hard by the credit crisis as the Home category (titles ranging from Pottery Barn to Improvements), and it has seen a significant slide in total universe. The 12-month active count for Home titles was 15.9M names at the end of 2Q 2009, down 2.2M (12.3%) in the past year.  The total universe has lost 2.6M names (14.3%) in the past two years (2Q 2009 vs. 2Q 2007).

HomeTotalUniverse2

Sometimes big losses from just a few key players can bring an entire sector’s universe down, but as the next chart shows, pain within the Home category was pretty widely distributed.

HomeCatalogFileSize2

The average change in housefile size for the Home category was -15% between 2Q 2009 and 2Q 2008.  71% of catalog files saw some sort of decline, while only 24% enjoyed growth.  Given the odds, the 5% of in-category marketers with no change may have been pleased to stay where they were.  (Note: “High” and “Significant” are defined here as plus or minus 15%; “Moderate” is 1-14%.)

Admittedly, bright spots in the Home category are not easy to find, but they are there if you put the sector under a magnifying glass and look at individual titles.  Given consumers’ current desire for value – be it price or practicality – it’s not a surprise that some of the biggest gainers in the Home category were lower-priced, everyday goods purveyors like Fresh Finds (up 78%), Picket Fence (up 25%) and Whatever Works (up 18%).

General Merchandise

The General Merchandise category, as defined by the R&A team, is dominated by budget-priced mailers like Carol Wright, Dream Products, Harriet Carter and Miles Kimball. “As Seen on TV” items are common in this category.  Average order size is typically $40-$60.

Due in part to lower average prices and more functional product offerings, General Merchandise catalogs appear to have fared a bit better than other sectors.  This is not to say that the category was recession-proof, as there were still declines in average housefile sizes.  But compared to the double-digit losses seen elsewhere, General Merchandise buyer universes collectively were down only 3% year-over-year.

GenMerchTotalUniverse2

The total 12-month active universe for the General Merchandise catalog market was 20.2M in 2Q 2009, down 607K names (-3%) from 2Q 2008.  In the past two years (2Q 2009 vs. 2Q 2007), the collective universe is down roughly 1.3M names (-5.9%).

While over 50% of individual General Merchandise titles reported lower buyer counts, the ratio of winners-to-losers was less dramatic than for Home catalogs.  The average change in housefile size for the General Merchandise category was -4.4% between 2Q 2009 and 2Q 2008.  54% of titles reported declines, 35% reported growth and 11% held steady.

GenMerchFileChange2

Some of the General Merchandise highlights of 1H 2009 include buyer file gains for Taylor Gifts and its spin off title, Get Organized (up 34% and 46% respectively). Growth was also seen from Lehman’s (up 26%) and The Vermont Country Store (up 19%), two titles with a similar blend of the nostalgic and the useful.

Given the still-frugal times, the General Merchandise sector is likely to continue performing a bit better than other sectors for the second half of 2009 and early 2010. The Home segment, however, may need a positive jolt to consumer confidence to reverse buyer file losses.  Recent positive housing reports give cause for optimism.  Let’s hope that if a recovery is in process, there’s some pent-up consumer demand to go with it.

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